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Kaufreue and buyer’s remorse – they mean the same thing, but people are coping differently with this seemingly universal affliction on either side of the Atlantic. It was just a year and a half ago that numerous private equity firms and other bidders were jostling to take Chrysler off its former German parent’s hands. Daimler undoubtedly regrets its nine-year dalliance with the US auto sector, having sunk $36bn into the deal in 1998 with nothing to show for it. The $7.4bn sale to Cerberus of an 80.1 per cent stake was more like paying them to tow the old clunker away when all was said and done. It has marked the remaining holding down to zero and still retains some liability for the pension plan in the likely event of a Chrysler bankruptcy.
Of course Cerberus has plenty to regret itself as it could not have timed the purchase of a US automaker more horribly. But the concept of Vertragstreue – being true to the letter of a sale agreement – seems to translate poorly, especially for US private equity firms that have excelled at exiting agreed takeovers recently. It is too late for Cerberus to do that, but it is seeking the remaining stake in Chrysler in order to make it easier to restructure or perhaps sell to General Motors and is playing hardball, making what an unamused Daimler calls “exaggerated demands”. Well after it completed due diligence and trumpeted the deal, Cerberus alleged impairment of Chrysler’s value by Daimler before the sale closed, possibly in an attempt to lay the groundwork for litigation.
But what more can they ask of Daimler, which would gladly unload its stake for pennies? Possibly a cash sweetener to make any legal problems go away or an extended commitment to international service centres that Chrysler was supposed to have taken over by now. There is no German word for that, but there is a Yiddish one – chutzpah.
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